The Real Deal New York

High-end Hamptons buyers have the stock market jitters

The view from an oceanfront home in Sagaponack, where the number of sales and prices has fallen.

For many New Yorkers, summer in the city would be a foreign concept without their weekend getaway in the Hamptons. But like Manhattan, the East End cannot be looked at as one giant housing market.

“Our submarkets are so specific, and so individual. There are markets like Westhampton Beach and the North Fork, which are busier than they can possibly be, and yet there are areas like Sagaponack that are sleeping a bit,” said Judi Desiderio, CEO of East End brokerage Town & Country.

The Real Deal recently looked at several key Hamptons towns to see what’s driving sales, which towns have seen big-ticket trades or price chops and where this season’s new hot restaurants and stores are opening.

Like the residential market in New York City, the Hamptons is in the midst of a correction, compounded by a volatile stock market, that’s given some high-end buyers the jitters. As a result, entry-levelhomes in the $1 million to $3 million range are selling rapidly, while the top of the market is softening—with sellers such Goldman Sachs CEO Lloyd Blankfein chopping the asking prices on their homes.

But a few massive sales seem to defy an ultra-luxury slowdown. In January, hedge funder Scott Bommer, a serial Hamptons flipper, sold his East Hampton estate for $110 million — the second-highest price in East End history.

Nonetheless, the average price for the 10 most expensive homes sold in 2015 was $35.5 million — a 20 percent drop from 2014,
according to Town & Country.

Below is a market-by-market look at the playground for New York’s wealthy.

Westhampton

Being the first stop on Route 27 has its benefits for Westhampton, one of the most low-key East End towns.

The area, which also includes the tiny village of Remsenburg, saw median prices hold while the number of sales dropped 17 percent during the first quarter compared to a year ago, to 48, according to data from the Corcoran Group. The average price was $1.2 million, down 15 percent year-over-year.

As a whole, however, buyers are still attracted to Westhampton because their money goes further than it does in many other East End towns.

Westhampton Beach is a hidden gem with growth potential, said Desiderio. “The younger generation [of buyers] feel like in Westhampton Beach they can go back to the city quickly. That’s a big draw,” she said

On Dune Road, Discovery Land CEO Michael Meldman paid $19 million for the site of the Dune Deck Beach Resort. He’s planning a luxury golf community called the Hills at Southampton.

Southampton

Once-pedigreed Southampton is seeing its share of newcomers and new money. Financier George Soros has a home in the area, and Southampton’s old-money types are increasingly rubbing shoulders with Hollywood stars and boldfaced names who gravitated to the trendy nightspots, beachfront estates and exclusive golf courses where memberships can cost as much as $600,000.

The family of the late investor Frank Wyman is selling a 6,500-square-foot manse on nearly 5.5 acres for $59.9 million. Meanwhile, the 15,500-square-foot spec house at 9 Olde Towne Lane, built on four acres by Kean Development, is asking $39.5 million.

Still, overall, Southampton Village saw 31 sales during the first quarter — a 9 percent year-over-year drop, according to Corcoran. That was even as the average sales price rose 19 percent, to $5.6 million, and the median spiked 25 percent, to $2.7 million.

Restaurateur Zach Erdem opened Kozu, a Japanese, Peruvian and sushi restaurant, as well as Summer House, a nightclub with nine high-end suites that will run $1,000 a night on weekends or $800 during the week. The Southampton Publick House relocated to new digs on Jobs Lane, and the Southampton Inn will open a new restaurant called Cafe Klyde.

Bridgehampton

Call it a bridge backup: Despite a recent uptick in home building, Bridgehampton is wrestling with tight inventory. There’s very little land left to develop in Bridgehampton — known as the heart of Hamptons horse country — partially because the town has purchased development rights to preserve open space.

Yet overall, sales volume and prices are slipping. The number of sales in Bridgehampton and nearby Sagaponack during the first quarter fell 18 percent year-over-year, to 33, according to Corcoran. At the same time, prices were down: The median sale price was $2.6 million (down 14 percent), and the average was $4.7 million (also down 14 percent).

Bridgehampton’s active downtown, anchored by Bobby Van’s Grill & Steakhouse, is still seeing its fair share of action: Celebrity chef Jean-Georges took over the restaurant at the historic Topping Rose House. And in Sagaponack, Pierre’s of Bridgehampton opened a specialty takeout spot in the space formerly occupied by the Sagg General Store.

Sag Harbor

Known for its whaling roots and artsy vibes, Sag Harbor and North Haven defied the rest of the East End market and saw an 8 percent jump in sales.

But while the waterfront community hit 64 residential sales during the first quarter of the year, the overall dollar value of those transactions was down year-over-year, as the median price slipped 22 percent, to $997,000, and the average price dropped 24 percent, to $1.6 million.

The priciest listing in the area is a 10,000-square-foot Greek Revival dubbed the Grand Captain’s House, which is asking $21 million.

Sag Harbor is seeing turnover in the village’s retail scene. In December, billionaire Ron Perelman purchased the building that formerly housed B. Smith restaurant (where rent reportedly rose to $40,000 a month). It will be an outpost of the Manhattan restaurant Le Bilboquet.

East Hampton

Known for its boldfaced names and record-smashing deals, East Hampton took the prize for priciest Hamptons sale in 2015 when 226 Further Lane sold in late October for $57.3 million. But that deal was bested in January when Bommer unloaded three properties on Lily Pond Lane for $110 million in an off-market deal — less than two years after paying about $94 million for them.

Meanwhile, in May, billionaire David Geffen bought a sprawling home at 199 Lily Pond Lane, from the estate of the late fashion executive Josephine Chaus, for $70 million.

Indeed, the exclusive enclave of East Hampton Village saw its average price skyrocket 53 percent, to $9.5 million, during the first quarter compared to the same time in 2015, according to Town & Country.

But the firm tracked just nine sales in that area during the first quarter, a 44 percent drop from a year earlier. Desiderio chalked that up to a softening market, but one in which owners aren’t willing to cut prices. “This is old money, so it’s, ‘If I don’t get my price, I am going to wait,’ ” she said.

Saunders agent Diane Saatchi said there’s a bit of a disconnect in the East Hamptons market, with younger buyers turned off by the area’s blue blood, Baby Boomer feel. “It’s like the buyers are Brooklyn and Downtown and the sellers are Carnegie Hill,” she said. “So we have the product but not the buyers.”

Amagansett

The more laid-back sibling to East Hampton, Amagansett is nonetheless a magnet for celebrities in its own right. Yet there was a chill in the market’s air.

There were only 24 sales during the first quarter, a 23 percent drop from the prior year. Still, despite the slide, prices were up: The median price jumped 19 percent, to $2.1 million, while the average price spiked 21 percent, to $2.8 million, according to Corcoran.

Brown Harris Stevens’ Kieran Brew said that at the moment, Amagansett is characterized by low inventory and high prices.

The priciest listing is the 3,600-square-foot Fleetwood Estate, which sits on 33 acres at 85 Ocean View Lane and is asking $19.9 million.

On the restaurant front, the Hamptons was buzzing in May, when Cyril’s Fish House announced it was shuttering after the owners were found guilty of illegally expanding.

Montauk

It’s impossible to discuss Montauk without giving a hat tip — or fedora tip — to the hipster scene that has defined it over the past five-plus years.

Often considered the Williamsburg of the Hamptons, Montauk’s raucous nightlife irks some locals. There’s no denying that trendy new restaurants, bars and hotels — including the Surf Lodge,
Ruschmeyer’s, Navy Beach and Sole East, among a slew of others — have transformed the town’s landscape in the past five years.

This summer, the local watering hole Sloppy Tuna re-opened under new management, while the owners of the Grey Lady restaurant — which has locations on the Lower East Side, in Aspen and on Nantucket — opened a Montauk outpost in the space formerly occupied by Harbor.

Against that backdrop, the Hamptons’ easternmost enclave has, not surprisingly, seen rising prices. For example, Andy Warhol’s former estate, built in the 1930s as a fishing camp, sold for $50 million in 2015. J. Crew CEO Millard Drexler, who paid $27.5 million in 2007, was the seller; the buyer was gallery owner Adam Lindemann.

Currently, a 35-acre property at 42 Old Montauk Highway is the priciest listing in Montauk, asking $55 million. And homes at the iconic Gurney’s Inn — now named the Residences at Gurney’s — are going for $4 million to $12 million.

“Montauk used to be called a fishing village with a drinking problem, or a drinking village with a fishing problem,” said Corcoran’s Lois Moore. “Urbanites now like the idea of being somewhere with open space, good restaurants and good hotels.”